Tesla touches two-year low as Musk does ‘hardcore’ cost focus
Tesla Inc. sank to a two-year low after Chief Executive Officer Elon Musk told employees that effective immediately he and the electric carmaker’s new chief financial officer will scrutinize every dollar spent in a “hardcore” focus on costs.
In an email to staff, Musk said it was extremely important to examine “every expenditure at Tesla, no matter how small, and be sure that it is critical.” He underscored the company’s $700 million first-quarter loss and said that even with more than $2 billion of cash on its books, it “actually only gives us approximately 10 months at the Q1 burn rate to achieve breakeven!”
Tesla, which this month raised $2.35 billion through debt and stock offerings, has received intense criticism from investors and analysts alike for the first-quarter loss.
Friday’s 7.6% slump in the shares pushed the decline this month to 22.8%. The stock has been among the hardest hit amid an escalation in the U.S.-China trade war.
China, which is one of the biggest auto markets in the world, is a key area of focus for Tesla. Earlier this year, the company broke ground on a battery and vehicle factory on the outskirts of Shanghai and according to Musk, could be making as many as 2,000 cars a week by the end of 2019.